Tesla to raise prices, backtracks on closing most stores

Felix Bryan

"As a result of keeping significantly more stores open, Tesla will need to raise vehicle prices by about 3% on average worldwide".

To soften the blow of the initial announcement, the company used projected savings to reduce prices across its range by around six per cent, while some models in Australia had prices slashed by around $80,000.

But in an update the company said that over the past two weeks it had been "closely evaluating every single Tesla retail location" and had "decidedto keep significantly more stores open than previously announced".

The move does not affect Tesla's decision to move all purchases onto the internet, as the stores will simply shift to a policy of helping customers with their online purchases. A small number will be kept in inventory if you want to drive away with one immediately, it added.

Like a speeding sports auto executing a hairpin turn, the company veered abruptly on Sunday, backtracking on an earlier announcement from just a week and a half ago that it would soon close all of its retail stores. However, cars will still be available for test drives at stores at the potential Tesla owner's request. Note, there will be no price increase to the $35,000 Model 3. The day after Tesla sent out invitations to the unveiling of the Model Y crossover, VP of Engineering Michael Schwekutsch announced his sudden departure. Although Tesla said it would concentrate on making up volume in Europe and China, neither of those markets appear able to take up the US' slack. The tweets initiated an investigation into whether Musk sent the tweets to inflate Tesla's stock price. The policy allows new buyers to drive the vehicle for 1000 miles or seven days. The company did emphasize that all sales would still be online only-salespeople will show customers how to order vehicles via an app.

Shares of the company, among Wall Street's most volatile in recent months, were roughly flat in early trading on Monday. Most of Tesla's leases didn't have cancellation clauses, either, leaving the company exposed to potential lawsuits.

The company said it would await the results of a further review on the usefulness of physical locations, and only cut the original price of the auto be "about 3%".

In addition to the e-mail to all employees, Teslaalsopublished a blog post Sunday night, conveying these details to shareholders and the general public. So that makes models S, 3, X and Y.

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